Going to view a retail unit

chillywilly

This will be my first time being in this kind of situation, ie dealing with EA and viewing the unit etc. I've got questions I clearly want to ask about it, I'm just wondering if you guys can think of anything I should ask or any advice in general?

I won't be making an offer yet though. The ad says rent negotiable but the unit is also up for sale. Is there a rough guide that I could follow to find out what the LL would be expecting? For example if the property was selling for €300,000 I would expect the LL would be looking for a yield of roughly 6-8% (roughly 23/24k p/a) or is that way off? I would expect there are different things to factors in ie location. This unit would be on a main street but not city centre, with some well known business names close by.

A unit on the same street is going for €35 per sq foot, should mine be the same?

Also do you believe in the "current climate" that rent should be/is returning to 10% of turnover? I think when it comes to it I think I am in a good position to negotiate I'm just not sure by how much.

MyPerfectCousin

All the advice I've got recently is to bargain hard, it is a renters' market.

For example, 3 months free rent is now standard. However, I know of one unit in Blackrock that got a year of free rent.

One piece of advice was to get the fourth year free, since you will have increased the value of the property by trading there successfully for three years.

I'm going another direction - asking for an early opt-out clause (15 months). In this case, I can't ask for more than the standard first three months free because I'm making a smaller commitment. But I was able to knock a couple thousand off the annual rent, plus an additional thousand for the first year.

You should also be able to get landlord agreement for certain parts of any re-fit -- anything that will be of benefit to the unit no matter who the tenant is.

I'm sure they have an asking price. Just negotiate down from there and use neighbouring rents, economic conditions, length of agreement, etc., to bolster your case.

AlkalineAcid

First three months free is standard?

sandin

AlkalineAcid wrote: »

First three months free is standard?

On a lease of 4years 9months, this would now be standard. On a long lease a 6 month rent free, 3 months year one + 3 months year 2 would be standard.

If I were ever going back into retail, i'd insist on base rent + % turnover. % would depend on type of trade.

MyPerfectCousin

AlkalineAcid wrote: »

First three months free is standard?

This was told to me separately by my bank manager, my accountant, and another retail trader. The landlord offered two months to start, so it wasn't hard to get it to three. As sandin said, if it's for a longer term lease you might be able to get more.

Boskonay

I was offered a year free on a 10 yr lease at an initial meeting with an EA, so it's all to play for.

blueyedson

MyPerfectCousin wrote: »

All the advice I've got recently is to bargain hard, it is a renters' market.


You should also be able to get landlord agreement for certain parts of any re-fit -- anything that will be of benefit to the unit no matter who the tenant is.

I'm sure they have an asking price. Just negotiate down from there and use neighbouring rents, economic conditions, length of agreement, etc., to bolster your case.

Do you mean the landlord may meet part of some of the costs of facilities that may benefit future tenants?

If a tenant is covering all costs of re-fit, I guess they should go for a longer lease to ensure they get the return on the investment.

Any more thoughts on this?

sandin

blueyedson wrote: »

Do you mean the landlord may meet part of some of the costs of facilities that may benefit future tenants?

If a tenant is covering all costs of re-fit, I guess they should go for a longer lease to ensure they get the return on the investment.

Any more thoughts on this?

Normally a developer will capitalise this up and spread it over the term of the lease.

So if a fit out costs €80,000, the developer will want €100,000 over 10 years of a lease to cover this cost + interest and therefore the bottom line rent will be €10,000 higher than that without the fitout.

For the tenant it means not having to go to the bank for a fit out loan.

chillywilly

Cheers for the advice so far lads. Keep it coming. When it comes to negociating I will bargain hard, I quite enjoy it anyway. And if you don't ask, you don't get!